Nasdaq OMX shares surge on report of talks with Carlyle

Nasdaq OMX Group Inc. posted its biggest intraday rally in more than a year on speculation the wave of attempted exchange takeovers that began in 2010 has yet to run its course.

Nasdaq shares surged 4.7% to a four-year high of $30.87 at 12:34 p.m. in New York following a Fox Business Network report that the second-largest U.S. stock-exchange operator held talks about going private with Carlyle Group LP. before discussions broke down over price. The shares gained as much as 9.1%, the biggest advance since August 2011.

Exchange companies, struggling to boost earnings amid shrinking profits for securities trading, have been the subject of more than $50 billion of takeover bids since 2010, according to data compiled by Bloomberg. NYSE Euronext agreed in December to be acquired by IntercontinentalExchange Inc., while London Metal Exchange was purchased by Hong Kong Exchanges and Clearing Ltd.

“Why Nasdaq sells is because it creates shareholder value,” Rich Repetto, an exchange analyst at Sandler O’Neill & Partners LP, said in a phone interview. “If they could sell it at $35 or $40, I think they’d be pretty happy,” he said. “If they can sell and create more value than what they think they can by just operating organically, then it’s the board’s duty to look at those options.”

‘Rumors or Speculation’

Rob Madden, a spokesman for Nasdaq OMX, declined to comment, saying the company doesn’t “comment on rumors or speculation.” Carlyle’s spokesman Randy Whitestone did not immediately return a call or email seeking comment.

Carlyle Chief Financial Officer Adena Friedman, who left Nasdaq in 2011 as chief financial officer and head of corporate strategy, was a “key player” in the negotiations, Fox Business reported.

Nasdaq Chief Executive Officer Robert Greifeld is re-organizing business units and reducing expenses as revenue from trading shrinks around the world. The exchange is expanding into derivatives, setting up a new London-based market and buying a 25% stake in a Dutch alternative trading system focused on stocks and equity derivatives.

The company reported fourth-quarter earnings that beat analysts’ estimates on Jan. 31 after cutting costs amid a decline in stock-market trading. Profit in the three months ended Dec. 31 jumped to $85 million, or 50 cents a share, from $82 million, or 45 cents, in the fourth quarter of 2011.

Greifeld said on a conference call after the earnings report that he didn’t see competition changing as a result of ICE’s purchase of NYSE.